Synaptics Rallies On Merrill Upgrade

Synaptics (SYNA) shares are trading higher today after Merrill Lynch analyst Steven Fox this morning raised his rating on the stock to Buy from Neutral. Fox notes that the stock is down 34% since he picked up coverage in November, and now trades at 13x calendar ‘09 estimates, or 10x ex-stock options. Fox says he walked away from the Consumer Electronics Show in Las Vegas last week convinced that advanced user interfaces for a variety of display applications is an investable theme for 2009 - and that SYNA’s semiconductor modules are well positioned to continue to benefit from the trends. He says concerns about notebook and handset sell-through is already more than reflected in the stock’s valuation, and that “recent Wall Street rumblings about second sourcing in computing programs is actually noise around the normal course of business.” Fox adds that there is an opportunity for Synaptics to increase shipments volumes in 2009 in handsets; while overall ... (link)